THE 2017 BUDGET SPEECH - ESI Attorneys

24 Feb 2017

Finance Minister Pravin Gordhan yesterday delivered his 2017 budget speech and the next few days will undoubtedly bring about much analysis and dissection of the provisions announced (as well as what was not announced) by all corners of society. 

Mr Gordhan highlighted in his speech the value of economic transformation of the economy and stressed the importance of maintaining a culture of exceptional sound fiscal policy. 

Tax wise, the most significant change for property investors will undoubtedly be the adjustment in the transfer duty threshold to R900 000.00 (up from R750 000.00) from the 1st of March 2017.

The new table for transfer duty is as follows:

0 – R900 000
R900 001 – R1250 000
3% of the value above R900 000
R1250 001 – R1750 000
R10 500 + 6% of the value above R1250 000
R1750 001 – R2250 000
R40 500 + 8% of the value above R1750 000
R2250 001 – R10 000 000
R80 500 + 11% of the value above R2250 000
R10 000 001 and above
R933 000 + 13% of the value above R10 000 000
Some of the other tax adjustment highlights included:
• An increase of between 6% - 10% for “sin taxes”
• An increase in the fuel levy by 30 cents
• An increase in dividend withholding tax to 20% (up from 15%)
• The introduction of an income tax rate of 45% for individuals of a taxable income above R1.5 million per annum
• The introduction of new maximum effective capital gains tax rates including:
o 18% for individuals and specified trusts
o 22.4% for companies
o 36% for non-specified trusts
Of particular note was the Ministers resolution that VAT will remain at 14%, a topic which was the subject of much public debate leading up to the speech.

ESI will of course be keeping up to date with the developments as they happen and
keep you informed.

Kind regards,
Esterhuyse Samuels Inc. Attorneys